MEDIA STORY

Wall Street Journal

Why the Over-50 Crowd Prefers Entrepreneurship

By MARK HENRICKS

When it comes to self-employment, people over age 50 are more likely than younger workers to take the plunge. Many of them also are diving into entrepreneurship for the first time, according to a study by AARP (formerly the American Association of Retired Persons).

The AARP study shows that 16% of those over age 50 are self-employed, compared to 10% of the general work force. About a third of the self-employed seniors also are first-time entrepreneurs who had previously always worked for others.

Age discrimination is one reason why self-employment appeals to those over 50, says Sara E. Rix, senior policy adviser for the Washington, D.C.-based AARP. She notes that it's still difficult for workers over a certain age to find employment. Consequently, for many, "self-employment can be ideal, and it's a voluntary step after retirement," she says. (Still, Ms. Rix adds, many seniors would prefer to continue working for others and receiving salaries and benefits.)

Hurt by Layoffs

High numbers of over-50 self-employed professionals also may be due to layoffs that disproportionately affected more-experienced workers earning higher salaries, says entrepreneurship researcher Andrew Zacharakis of Babson College. "It's harder for older workers to compete for open jobs in a soft economy, so they had a choice of either early retirement or finding something else that might pay," he says.

Other self-employed seniors may have been laid off and then rehired as independent contractors by their former employers, adds Mr. Zacharakis. Still others could have accepted early retirement offers before they were mentally ready to retire. "Feeling too young to golf their days away, they work to make their hobby a job," he says.

But increasing numbers of over 50s are starting businesses for the first time, says Jeff Williams, a start-up consultant in Arlington Heights, Ill. These people usually want to supplement their retirement income, experience a new challenge or both.

"Sometimes they're looking for the ability to make 12 months' income in less than 12 months a year," he says. "That's their idea of retirement, not totally stopping work." Compared to younger entrepreneurs, seniors are less willing to invest large sums in start-ups and are more concerned about choosing a business they'll enjoy, says Mr. Williams. "Every business owner would like to do something they enjoy, but it's particularly critical for these people," he says.

Weight Loss as Art

Janice Taylor is an example of an older American who chose to become an entrepreneur largely for the fun of it. Not long after she turned 50 last year Ms. Taylor gave up an investor relations position at a New York City media company to pursue a venture that mixes weight control with art. She fell into the business almost by accident, after learning that people were strongly attracted to a dieting approach she developed while trying to lose weight.

"I started making art about food instead of eating it," Ms. Taylor explains. "I exchanged 50 pounds of excess weight for 50 pieces of art." Making the pieces not only helped her to stay on her diet, but they also sold well at an art fair and through a Web site. The art line, called "Our Lady of Weight Loss," blends religious and food images. It includes a line of greeting cards encouraging dieters to stay the course.

"One day I walked in and said, 'I can't take it anymore. I'm going to do this full time,' " Ms. Taylor says. Despite promising developments such as a coffee-table book project, her income remains well below what she previously earned, and she works more hours than ever. "I was making a six-figure salary, and I'm not now," Ms. Taylor says. "But I really don't care. I've never been happier."

A Spa Is Born

Mary Rooney Sheahen lost her job as a Chicago hospital CEO in 2000, but eventually opted to start her own company rather than seek another position in health-care administration. "It gave me an opportunity to step back and say, 'Do I want to keep doing this?'" Ms. Rooney Sheahen recalls.

After working as a leadership consultant, she became interested in starting a day spa in Galena, Ill., a tiny resort town in the state's northwest corner, where she and her husband owned a country house. The $7 million project, which she financed with savings and mortgages on their property, opened in July 2003 and is doing better than expected with its offering of massages, facials and other treatments.

Best of all, "I love it. I absolutely love it," says Ms. Rooney Sheahen, a registered nurse who restricts her role in the spa to management. "I still walk in there and cannot believe I did this. It's kind of scary, but when I look around the spa, I feel I'm making a difference for people." So far, she hasn't taken a salary, but from the spa's better-than-expected results, she expects to replace a substantial portion of the "healthy six figures" she earned as a CEO with earnings from the facility.

Translation Challenges

These newcomers to business ownership can take heart from veterans such as Beth Williams, a former Houston real-estate broker who 11 years ago joined with a Russian-speaking neighbor to start a translation company servicing the National Aeronautics and Space Administration (NASA). Ms. Williams, 66, has had her share of adversity, including the loss of her business partner in an automobile crash two months after starting the business. Today her firm, TechTrans International Inc., employs 180 in offices in Russia and Moscow and generates $13 million translating, interpreting and performing related services for NASA and other government and corporate clients.

Ms. Williams welcomes further challenges, which was her main reason for starting the business.

"I had just recovered from cancer that was quite extensive, and I figured if I can beat that, I can do this," she says. "I really like a challenge and this seemed like a good one."

Retirement still doesn't figure in her plans. "I never gave it a thought," she says. "And it never occurred to me that there was anything unusual about being 55 and starting a company until you brought it up."

-- Mr. Henricks, an Austin, Texas, journalist, is the author of "Not Just a Living: The Complete Guide to Creating a Business That Gives You a Life" (Perseus Books, 2002).